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Central Contra Costa Sanitary District
August 27, 2010
TO: HONORABLE MEMBERS OF THE BOARD
FROM: JAMES M. KELLY, GENERAL MANAGER
SUBJECT: STATUS OF SENATE BILL 1425 AND ASS MBLY BILL 1987: PUBLIC
RETIREMENT, FINAL COMPENSATION, COMPUTATION
Activity on both SB 1425 and AB 1987 has ramped up over the past two weeks. Both bills have
been amended in the past eight days to reflect the following:
• Any change in salary, compensation, or remuneration principally for the purpose of
enhancing a member's benefits would not be included in the calculation of a member's
final compensation for purposes of determining that member's defined benefit.
• The board of each state and local public retirement system must establish an ongoing
audit process to ensure that a change in a member's salary, compensation, or
remuneration is not made principally for the purpose of enhancing a member's
retirement benefits.
• The calculation of a member's final compensation will be limited to an amount not to
exceed the average increase in compensation received within the final compensation
period and the two preceding years by employees in the same or a related group as that
member.
• A person who retires on or after January 1, 2012, may not perform services for any
employer covered by a state or local retirement system until they have been separated
from service for a period of at least 180 days.
• Both bills become operative on July 1, 2011, and only operative if the other is also
enacted and takes effect on or before January 1, 2011.
SB 1425 is currently on the Senate Floor and scheduled for a third reading.
AB 1987 has had its second reading on the Senate Floor, and was referred to the Senate Rules
Committee on August 23, 2011.
Both bills have passed their Committee votes unanimously with recommendations to the Senate
to pass them. While a number of legislators have recently removed their names from the bills
following criticism from the media on the poorly drafted legislation, the latest amendments would
seem to be drawing renewed support from the media.
The move of AB 1987 to the Rules Committee and the suspension thereof of Senate Rule 29.3
may well allow for a vote on both bills beyond the August 31 date for the close of Summer
Session. Nothing specific is scheduled as of today.
Since further amendments are expected before the session ends, staff will provide an update at
the Board meeting.
Central Contra Costa Sanitary District
August 27, 2010
TO: HONORABLE MEMBERS OF THE BOARD
FROM: JAMES M. KELLY, GENERAL MANAGER ?10
SUBJECT: POSSIBLE LEGISLATION ARISING FROM THE CITY OF BELL
COMPENSATION SCANDAL
Among the many legal responses to the Bell payroll scandal, state lawmakers are set to
vote on August 27, 2010, on six bills aimed at bringing salaries of public officials into
plain view and punishing cities that pay officials too much.
The package of six bills require local cities and the state to disclose the salaries of
public employees, punish charter cities that pay "excessive" salaries, and place caps on
the pensions of high -paid public workers.
The six proposals face a Tuesday, August 31, 2010 (end of Summer Session) deadline
for passage. The bills include:
S.B. 501, which would require salaries of local officials to be posted on the Internet;
A.B. 2064, which requires online posting of local salaries but also requires posting
salaries of state elected and appointed officials;
A.B. 827, which prohibits the automatic renewal of raises exceeding the cost of living,
and also prohibits severance agreements of longer than a year;
A.B. 192, which requires cities that hire someone from another city and provide that
person with a 15 percent or greater raise to pay the difference in pension benefits that
person would receive;
A.B. 194, which sets a cap on retirement benefits for public employees;
and A.B. 1955, which sanctions council members in charter cities who give themselves
salaries above the state limits.
It is expected that one or more of these Bills will be passed in some form this session.
Staff will provide an update at the Board meeting.